bargainman

Well I'm not sure if I would characterize my post as one of the over enthusiastic ones, but I do agree with this last point. it's more a reaction to MSFT's valuation vs its competitive position. The implication I made was just that MSFT isn't sitting down just letting everyone else own this market. They are actively engaged and very cognizant of what's going on, to the order of being one of the 3 biggest server owners. Now how successful they will be is a question. But they have a legion of developers they would like to keep and migrate. Sanj I don't understand your comment about Apple having the "most intuitive appliances to take advantage of the cloud". I guess you're referring to their consumer devices? I agree that they are intuitive. Or are you referring to some cloud appliance like Google's search appliances? MSFT at least is making a bigger play on the backend and the application development stack, that's less unrelated to the devices. As I've said a few times (I think on this board), MSFT is really more of an enterprise company now. Val, when you're talking about the "Linux-Apache-MySQL-PHP (LAMP) stack" is that very scalable? Does it just sit on top of a scalable application server?

Wikipedia has a pretty good entry on this... http://en.wikipedia.org/wiki/Cost_of_capital

There are 3 companies that reportedly have over a million servers in data centers. Amazon, Google, and you guessed it.. Microsoft. If anything I would say Apple is the company that's bringing up the rear when it comes to cloud computing...

http://www.dailymail.co.uk/home/moslive/article-2001697/Microsofts-Bill-Gates-A-rare-remarkable-interview-worlds-second-richest-man.html

LOL! well that's all good then :-)

Personally I think it's not her finest work.. by far. She draws up a comparison, then basically complains about the progress of industry that makes basic goods cheaper, then complains that the internet retailers and putting the old school retailers out of business cause they're more efficient. Then complains about the entertainment economy and loss of manufacturing, which is ironic given she's a writer and could be classified as being in the entertainment industry. Then she offers no thoughts on any solution to the problem. A pretty shallow article IMHO.

What terms of recourse does the lender have in Vancouver compared to Florida which also has recourse financing? And Nevada which does too? are you sure Florida has recourse? http://www.loansafe.org/forum/foreclosure-laws/4130-recourse-v-non-recourse-states.html

I agree, only more so. I think you are off by many many orders of magnitude. --Eric Do you really think so? Remember that that MSFT was a convicted monopolist. The real question is, what would the world have been like without MSFT and all the monopolistic practices it engaged in over the 10 years or so when Gates led the company. I'm really surprised that people see Gates' past actions at MSFT in such a positive light these days. (no doubt his philanthropic actions are fabulous). I lived through the days when MSFT cast a very big shadow over the industry, and many people argued that MSFT killed a lot of innovation, and a lot of competitors, through uncompetitive practices. Now that the tables have finally started turning with large players like GOOG, AAPL, AMZN, and others (who are big enough to stand up to MSFT), we are seeing a rebirth of innovation in the web, devices, and software. Many would argue that MSFT prevented that for years by engaging in monopolistic practices.. Think about how slow browser innovation had been for years until Firefox and Chrome came on the scene. I'm not saying he didn't add a lot of value, just that I wonder how much more would have been added had his company not been a ruthless monopoly.

A lot of very interesting points of view. We had someone come by our company recently and talk about edible landscaping, and emphasize how much land is just wasted on green lawns! Apparently edible landscapes are all over the place in europe. I think this is her book: http://www.amazon.com/Edible-Landscaping-Rosalind-Creasy/dp/1578051541 On another note here is a projection by Oxfam calling for food prices to double by 2030 http://www.msnbc.msn.com/id/43221576/ns/business-consumer_news/?GT1=43001 I suspect they mean in real term since doubling by 2030 in dollar terms is probably just matching inflation...

Wow, i thought you were kidding! http://dealbreaker.com/2010/01/jeffrey-gundlach-not-set-up-by-tcw-big-fan-of-dr--fellatio-series/ He did say in the interview that he used to be a drummer for a rock and roll band! Oh well I guess some habits die hard.

Can anyone give me and others on the board a general primer on how to value a bank? I only know a few very basic things. ROA > 1% ROE > 12% as a general rule. I've heard about tier 1 capital etc but I'm not 1005 sure what that means. I remember reading that changes by the FASB 157 back in the day became one of the tipping points since banks could no longer count assets at original value and had to mark them to market when the market was imploding. I understand that the bank has to hold a certain amount of capital/liquidity for all the loans they give out. Other than that I've heard that WFC, JPM are the strongest banks. I've heard good things about PCBC as a jockey bet. But I'm not sure what the 10 step checklist should be to evaluating banks. Anyone care to share? It'd be much appreciated.

Read this article: http://news.morningstar.com/articlenet/article.aspx?id=271892

Hmm.. why wait? Why wonder? Range bound volatile market is perfect for selling options premium! Just sold some puts on WFC, BRK, EBIX, and SHLD. It's a good way to earn while you wait...

Yes and no. Android is given away for free and monetized via search. Google's business model allows it to give things away which makes it easy for them to compete against an established player. But the second and thirds that tend to win have a major advantage. Take the iPod. There were a ton of mp3 players out there, but Apple came in with a great design, and as importantly a great vertical strategy, plus the market was massively fragmented, so Apple could take it over and own it. MSFT goes in with Zune after Apple has massive market share. it gets its act together on mobile after RIMM, Apple, and Google have carved out huge portions of the market. 2nd and 3rds can win, but it depends on who they're following. Apple and Google are pretty formidable acts to follow... (Back in the day it was easier to follow Apple, but Apple's huge now, and a lot smarter than they were in the first OS war.. IMHO)

Personally of all the things, I'm most concerned about food production. The latest letter by Grantham (I think that was it) talked about how top soil is being depleted quicker than it's being replaced, and how fertilizer is not being mined as quickly. Also food supplies are subject to wilder swings and have potentially severe consequences (starvation/death/war). The letter also talked about how the rate of improvement in crop growing efficiency has slowed, but the growth in the population is still exponential, and the growth in emerging markets for beef/western diets continues to strain farmland. I think Mike Burry recently said that he was buying up farmland with access to water no? I just wonder how much further we can increase food growing efficiency. I'm pretty sure there's a long way to go with regards to electronics and nanotech and biology/disease management etc. But I'm not so sure about food production.. Anyone have an opinion?

It's an interesting thought. I ran across similar reasoning regarding Microsoft's foray into the tablet market. Users of Windows will have an easier time translating their proficiency to a tablet operating under Windows vs. a tablet operating under Apple / Android / QNX. I agree with the rationale, but I'm skeptical given that most tablet use today occurs inside a browser and users need to move from a point-and-click interface to touch interface. Then again, I find the iPad operating environment way too restrictive and applications too verticalized/silo'd. I long for a true operating system - perhaps Android, Chrome OS or Windows 8 will fill the gap. I agree that there are a lot of IT folks and the like in the enterprise that are trained on MS software, and that is a moat for sure, especially for current devices. However, with regards to the tablet here's a funny video imagining if MSFT had designed the iPod box: http://www.youtube.com/watch?v=aeXAcwriid0 Basically the point is that MSFT seems to be so concerned with branding things that they forgot to make the product really the best for its form factor. I remember looking at MSFT's early smart phones and couldn't figure out why on earth the UI people decided to put a big start button on there. The design was totally off and wasted precious screen real estate making it hard to use. But hey, it was 'on brand'. So the question becomes, what is more important, the brand or focusing on the form factor and making the best experience possible for that form factor. (MSFT has finally started to get it with Windows 7 phone, after being killed by Apple and Google). I think Steve Jobs said it and I tend to agree: MSFT is run by Ballmer who is a sales/marketing guy, not a product/engineering guy. When that happens to a tech company it tends to lose its innovative edge, but they focus on hitting their sales numbers. It seems to me that MSFT was always 2nd or 3rd or later to a market, which is by necessity since they can only go after big markets. But when someone else like Apple or Google is in the market already, it's pretty hard to make headway.

I don't know. 2 years off school is fine if at the end they go on to have a successful career or if they go back to school. I know several people who took a year off between high school and college to work and see the world, and I don't think it held them back much. I guess it all depends on what they do after the 2 year stint is up. It's not like the 2 year stint destroys the rest of their life or something. These are superstar students, I'm sure they'll get into a good college or 2 ever after the 2 years.

I have a tough time with this one. I see both sides of the argument I'm just not sure where I fall. Ray Kurzweil, the famous futurist and AI expert, is fond of pointing out that innovation is actually increasing exponentially, but we think of it increasing linearly. Seeing many examples of exponential innovation, I tend to agree. But there are many things that don't improve exponentially. Anyone ever heard of a bifurcation diagram? http://en.wikipedia.org/wiki/Bifurcation_diagram I'm far from an expert, but the basic idea is that you have a simple population equation with a rate of growth, and some factor for emulating carrying capacity. The diagram graphs the final population, per the simple formula, versus the rate of growth. What ends up happening is that when you get started the population converges to a single point. As the rate goes up, the population fluctuates between 2 points (high population, results in death, low population, results in plentiful resources which leads back to high population etc). Then it bifurcates into 4 points and 8 points etc.. but then there is a point at which the points on the graph are completely chaotic and unpredictable. As the rate moves up you get some predictable points again, and then chaos again. So what am I talking about? Well, I'd agree with the opinions in the article posted if I believed that things moved slowly and linearly. But since a very simple population equation can lead to chaotic action, it's not a stretch for me to believe that temporary blips in resources can and will lead to mass unforeseeable consequences. I guess much like Taleb argues. Take also for example, the island of Nauru, and the correct predictions of peak oil in the US by Hubbert (in spite of rididcule by his peers), among others, and I think we'd agree that humanity is unprepared for major shifts, and even denies they are coming. I mean some of that is the basis for behavioral finance... So the optimist in me who wants to agree with the article and wants to believe that humanity can overcome, is looking at this exponential population growth, the linear or less growth in topsoil productivity, the fact that it takes years to get a new mine out (for things like fertilizer), and wonders if Thomas Malthus might have the last laugh... I think it's too late on sunday night and I should get outta here! ;D

I agree with the first sentence, not sure sure about the second (integrity part). Maybe Gates has irreversibly changed his ways, but I still remember the Gates of old, crushing competitors, monopolistic practices, buying companies then shuttering their technology to get them out of the market. Doing anything to win. Now he's rich and wants to save the world from Malaria and is best friends with Buffet. Good for him, but I still question his past motives. That said I agree 100% on your statements regarding Einhorn...

I don't see how Einhorn is going to do this. It's one thing when he's shorting JOE, a piddly company losing money and posting gloomy looking pictures on the internet, it's an entirely different thing when he has a minuscule share of MSFT. I guess his 'loudness' might move the needle? I suspect that Einhorn knows next to nothing about the tech industry. Next to the MSFT's board of directors, I'm sure his knowledge of tech and the tech industry pales in comparison.

Interesting article: http://www.cnn.com/2011/WORLD/meast/05/29/us.saudi.prince.oil/index.html?hpt=T1 "We don't want the West to go and find alternatives, because, clearly, the higher the price of oil goes, the more they have incentives to go and find alternatives," One idea I thought was very interesting was for the US to enact a price floor on oil. It would be done through a tax which would then go to fund alternative energy sources. The advantage of doing that would be first that producers could rely on a certain price and hence would develop alternative oil sources, and also alternative energy could become feasible since oil would remain relatively expensive and not go through massive dips that could undercut alternatives. I'm not sure how feasible that idea would be, and I'm sure it's full of holes, but found it interesting nonetheless.

Well one reason I think they can't just buy google or apple stock is their monopolistic history. People would be crying foul if they tried to buy those 2 in particular, although I wonder if they still own the Apple stock they bought back when Steve Jobs first came back to Apple. That said I did comment about this on a thread a long time ago, in particular I found it odd that Bill Gates, being on BRK's board didn't push MSFT in this direction..

Thanks, I think it was Dash, and I didn't mean a literal shouting match, sorry. I remember Sardar coming out at the most inopportune time and stating he and BH had nothing to do with the Denny proxy fight or Dash. I think I was confusing them. Are Dash and Biglari associated in any way? There was the whole Enhance Denny's committee no? Here is a reference to the 'shouting match' I was referring to: http://www.mysanantonio.com/default/article/Biglari-name-invoked-in-Denny-s-proxy-fight-793095.php Oh here is something else I just found: http://finance.yahoo.com/news/Dennys-Stays-in-the-tsmp-3988930977.html?x=0 "Jonathan Dash of Dash Acquisitions, a member of the committee, has also been involved in three other restaurant activist campaigns: Friendly's, Western Sizzlin and Steak n Shake, all of which have involved current Steak n Shake CEO Sardar Biglari. Dash has also been on the board of Western Sizzlin and consulted to Steak n Shake in recent years."

Oh goodness! I thought you might be talking about the professional wrestler!!! On that note, sadly Randy "Macho man" Savage died the other day... RIP Randy...

Didn't Bigs and Linnartz get into a shouting match over the Denny's activist deal? Or am I remembering incorrectly? I also remember Linnartz giving a less than stellar interview about why you should vote for their side on the Denny's proxy.. I think it was Dennys, but I'm having a hard time remembering the details.